Bond Price
720,000.00
$
Investment in Bonds
Stated Rate
3%
Discount on bond investment
Market Rate
4%
Cash
Interest
10,800.00
$
Cash
Principal
720,000.00
$
Premium on bond investment
Interest Revenue
Paid
600,000.00
$
720,000.00
$
120,000.00
$
600,000.00
$
10,800.00
$
1,200.00
$
12,000.00
$
12/27/2024
875,000.00
$
1/3/2025
880,000.00
$
12/31/2024
873,000.00
$
2024
Loss
(2,000.00)
$
2025
Gain
7,000.00
$
12/27/2024
875,000.00
$
12/31/2024
Loss on Investment
1/3/2025
880,000.00
$
Fair Value Adjustment
12/31/2024
873,000.00
$
1/3/2025
Fair Value Adjustment
Gain on investment
1/3/2025
Cash
Investment in bonds
Fair Value Adjustment
2,000.00
$
2,000.00
$
7,000.00
$
7,000.00
$
880,000.00
$
875,000.00
$
5,000.00
$
LT Investment
310,000,000.00
$
7/1/2024
Investment in bonds
Interest Rate
6%
Market Rate
9%
Paid
280,000,000.00
$
12/31/2024
Cash
Discount on bond investment
FV as of 12/31/24
290,000,000.00
$
Investment in bonds
Discount on bond investment
Amount recorded on BS
1/2/2025
Cash
Discount on bond investment
Loss on sale of investments
310,000,000.00
$
Discount on bond investment
30,000,000.00
$
Cash
280,000,000.00
$
9,300,000.00
$
3,300,000.00
$
Interest Revenue
12,600,000.00
$
310,000,000.00
$
26,700,000.00
$
283,300,000.00
$
270,000,000.00
$
26,700,000.00
$
13,300,000.00
$
Investment in bonds
310,000,000.00
$
Short Term
Cost
FV
Unrealized
12/31/2024
Blair, Inc
520,000.00
$
385,000.00
$
(135,000.00)
$
ANC Corp
470,000.00
$
520,000.00
$
50,000.00
$
Total
990,000.00
$
905,000.00
$
(85,000.00)
$
Long Term
Drake Corp
520,000.00
$
580,000.00
$
60,000.00
$
Aaron Industries
700,000.00
$
680,000.00
$
(20,000.00)
$
Totals
1,220,000.00
$
1,260,000.00
$
40,000.00
$
(45,000.00)
$
Loss on investments
45,000.00
$
Fair Value Adjustment
45,000.00
$
Painters Equipment Company
Purchase
Purchased
20%
Shares
410,000
Purchase price
490,000.00
$
Net income
AMC Net Income
260,000.00
$
Cash Dividends
0.20
$
Dividends
FV of shares
516,000.00
$
Adjusting Entry
Investment in equity securities
490,000.00
$
Cash
490,000.00
$
No journal entry required
Cash
16,400.00
$
Dividend Revenue
16,400.00
$
Fair Value Adjustment
26,000.00
$
Gain on investments
26,000.00
$
Investment in equity affiliate
52,000.00
$
Investment Revenue
52,000.00
$
Cash
16,400.00
$
Investment in equity affiliate
16,400.00
$
No adjusting entry required
3/31/2024
Distribution Transformers Corp
8%
460,000.00
$
9/1/2024
American Instruments
1,080,000.00
$
10% at FV
9/30/2024
Distribution Transformers Corp
Received semiannual interest
10/2/2024
Distribution Transformers Corp
515,000.00
$
Sold
11/1/2024
M&D Corp
1,700,000.00
$
6% at FV
12/31/2024
American Instruments
1,036,000.00
$
MV
M&D Corp
1,766,000.00
$
MV
American Instruments
(44,000.00)
$
M&D Corp
66,000.00
$
22,000.00
$
Interest Revenue
71,400.00
$
Gain on investments
33,000.00
$
Investment in bonds
2,780,000.00
$
Income Statement
Interest Revenue
71,400.00
$
Gain on investments
77,000.00
$
Net Income
148,400.00
$
Statement of comprehensive income
Net Income
148,400.00
$
Other Comprehensive income
-
$
Comprehensive income
148,400.00
$
Balance Sheet
Assets
Current Assets
Interest Receivable
53,000.00
$
Investments
Investment in bonds
2,780,000.00
$
Add: Fair value adjustment
22,000.00
$
2,802,000.00
$
Shareholders' Equity
Retained earnings
148,400.00
$
3/31/2024
Investment in bonds
460,000.00
$
Cash
9/1/24
Investment in bonds
1,080,000.00
$
Cash
9/30/2024
Cash
18,400.00
$
Interest Revenue
10/2/2024
Fair Value Adjustment
55,000.00
$
Gain on investments (unrealized NI)
10/2/2024
Cash
515,000.00
$
Investment in bonds
Fair Value Adjustment
11/1/2024
Investment in bonds
1,700,000.00
$
Cash
12/31/24
Interest Receivable
36,000.00
$
Interest Revenue
12/31/2024
Interest Receivable
17,000.00
$
Interest Revenue
12/31/2024
Fair Value Adjustment
22,000.00
$
460,000.00
$
1,080,000.00
$
18,400.00
$
55,000.00
$
460,000.00
$
55,000.00
$
1,700,000.00
$
36,000.00
$
17,000.00
$
22,000.00
$
3/31/2024
Distribution Transformers Corp
7%
490,000.00
$
9/1/2024
American Instruments
1,035,000.00
$
8% at FV
9/30/2024
Distribution Transformers Corp
Received semiannual interest
10/2/2024
Distribution Transformers Corp
524,000.00
$
Sold
11/1/2024
M&D Corp
1,500,000.00
$
5% at FV
12/31/2024
American Instruments
976,000.00
$
MV
M&D Corp
1,570,000.00
$
MV
American Instruments
(59,000.00)
$
M&D Corp
70,000.00
$
Total
11,000.00
$
Income Statement
Interest Revenue
57,250.00
$
Gain on investments
34,000.00
$
Net Income
91,250.00
$
Statement of comprehensive income
Net Income
91,250.00
$
Other comprehensive income
11,000.00
$
Gain on investments
45,000.00
$
Reclassification adjustment
34,000.00
$
Comprehensive income
102,250.00
$
Balance Sheet
Assets
Interest receivable
40,100.00
$
Investments
2,546,000.00
$
Investment in bonds
2,535,000.00
$
Fair Value Adjustments
11,000.00
$
Shareholders' Equity
Retained Earnings
102,250.00
$
3/31/2024
Investment in bonds
490,000.00
$
Cash
9/1/2024
Investment in bonds
1,035,000.00
$
Cash
9/30/2024
Cash
17,150.00
$
Interest Revenue
10/2/2024
Fair Value Adjustment
34,000.00
$
Gain on investments OCI
10/2/2024
Reclassification adjustment
34,000.00
$
Fair Value Adjustment
10/2/2024
Cash
524,000.00
$
Investment in bonds
Gain on investments NI
11/1/2024
Investment in bonds
1,500,000.00
$
Cash
12/31/2024
Interest Receivable
27,600.00
$
Interest Revenue
12/31/2024
Interest Receivable
12,500.00
$
Interest Revenue
12/31/2024
Fair Value Adjustment
11,000.00
$
Gain on investment OCI
490,000.00
$
1,035,000.00
$
17,150.00
$
34,000.00
$
34,000.00
$
490,000.00
$
34,000.00
$
1,500,000.00
$
27,600.00
$
12,500.00
$
11,000.00
$
10/18/2024
Bought shares Millwork Ventures Company
2,000,000
10/31/2024
Semiannual interest from Kansas Abstractors bonds
11/1/2024
Purchased bonds of Holistic Entertainment HTM
11/1/2024
Sold Kansas Abstractors bonds
12/1/2024
Purchased bonds of Holistic Plastics HTM
12/20/2024
Purchased US Treasury bonds
12/21/2024
Purchased shares NXS Corporation
4,000,000
12/23/2024
Sold US Treasury bonds
12/29/2024
Received cash dividends from Millwork Ventures Company
12/31/2024
Recorded adjusting entries for investments
1/7/2025
Sold NXS Corporation shares
Kansas Abstractors bonds
10%
Millwork Ventures Company
$28.50/share
NXS Corportion
$14.50/share
FV of Household Plastics
58,900,000.00
$
FV of Household Entertainment Enterprises
16,600,000.00
$
Household Plastics
Date
Cash Interest
11/1/2024
64,000,000
66,000,000.00
$
10/18/2024
1,800,000.00
$
18,000,000.00
$
10%
10 year
41,000,000.00
$
10/31/2024
60,000,000.00
$
12%
10 year
7,300,000.00
$
50,000,000
50,000,000.00
$
11/1/2024
7,700,000.00
$
9,000,000.00
$
11/1/2024
46,000,000.00
$
45,000,000
$
2,250,000
$
11/1/2024
57,000,000.0
(9,000,000.0)
58,000,000.0
8,000,000.00
12/1/2024
12/20/2024
12/21/2024
12/23/2024
12/23/2024
12/29/2024
12/31/2024
12/31/2024
12/31/2024
1/7/2025
1/7/2025
Investment in equity securities
66,000,000.00
$
Cash
66,000,000.00
$
Cash
1,800,000.00
$
Interest revenue
1,800,000.00
$
Loss on investment
4,000,000.00
$
Fair value adjustment
4,000,000.00
$
Cash
41,000,000.00
$
Fair value adjustment
4,000,000.00
$
Investment in bonds
45,000,000.00
$
Investment in bonds
18,000,000.00
$
Cash
18,000,000.00
$
Investment in bonds
60,000,000.00
$
Cash
60,000,000.00
$
Investment in bonds
7,300,000.00
$
Cash
7,300,000.00
$
Investment in equity securities
50,000,000.00
$
Cash
50,000,000.00
$
Fair value adjustment
400,000.00
$
Gain on investment
400,000.00
$
Cash
7,700,000.00
$
Fair value adjustment
400,000.00
$
Investment in bonds
7,300,000.00
$
Cash
9,000,000.00
$
Dividend revenue
9,000,000.00
$
Interest receivable
300,000.00
$
Interest revenue
300,000.00
$
Interest receivable
600,000.00
$
Interest revenue
600,000.00
$
Loss on investment
1,000,000.00
$
Fair value adjustment
1,000,000.00
$
Loss on investment NI
12,000,000.00
$
Fair value adjustment
12,000,000.00
$
Cash
46,000,000.00
$
Fair value adjustment
4,000,000.00
$
Investment in equity securities
50,000,000.00
$
Company bought 40% of outstanding common shares for $550,000,000 as of 1/2/24
Book value of assets $850,000,000
FV exceeded $10,000,000 of inventory
FV exceeded $15,000,000 for plant facilities
Useful life of plant facilities 15 years
All inventory acquired was sold during 2024
Reported Net Income $170,000,000
Paid cash dividends $60,000,000
Purchase of investment
Report net income
Receiving dividends
Inventory adjustment
Depreciation adjustment
Northwest amount of income
Investment on Balance Sheet
Statement of Cash Flow
Investment in equity affiliate
550,000,000.00
$
Cash
550,000,000.00
$
Investment in equity affiliate
68,000,000.00
$
Investment revenue
68,000,000.00
$
Cash
24,000,000.00
$
Investment in equity affiliate
24,000,000.00
$
Investment revenue
4,000,000.00
$
Investment in equity affiliate
4,000,000.00
$
Investment revenue
400,000.00
$
Investment in equity affiliate
400,000.00
$
Share of net income
63,600,000.00
$
Investment balance
589,600,000.00
$
Operating cash flow
550,000,000.00
$
outflow
Investing cash flow
24,000,000.00
$
inflow
